Thus, it is important that an e-commerce strategic projection has to be incorporated in a company's strategic business plans. (King, et al, 2004)
For the purpose of this paper we shall examine the details of a specific Electronic Commerce tactic in this case the electronic data exchange and analyze the effects it has on three companies which are Amazon inc., MySpace Company and First American bank.
For firms, e-commerce implies using the web and the internet as a channel of distribution in marketing and selling of goods and also service to the firm's customers. This is a narrow definition, of e-commerce as it only describes internet commerce. E-commerce is much wider in what it entails. According to King, et al (2004) e-commerce is the exchange of information, services, goods and payments electronically and it involves formation and continuation of Web-based relationships. Thus, e-commerce encompasses the internet, extranets, intranets, electronic data exchange (EDE) and other electronic aspects. Examples of activities performed using e-commerce includes;
Internet has globalized this world and in the same e-commerce is global. Difference in cities or countries even does not affect e-commerce if you have any kind of crises you can log on from any where in the world and can solve your problem in a faction of a minute. Transaction is very fast and effective; many online business sites now offer sophisticated tools to help consumers manage all their assets more effectively and conveniently. (King, et al, 2004) A simple example of this can be taken from the simple accounting software e.g. in the banking sector. Some online banks provide to simplify record keeping. Another importance of e-commerce is that less paper work has to be done and once u have entered information, it doesn't need to be re-entered for similar consequent checks, and future payments can be programmed to occur automatically.
Importance of e-commerce on companies
E-commerce serves as a vital strategic tool for companies. When e-commerce is well used in companies it brings considerable opportunities to the company. The importance of e-commerce to companies can be classified in two main classes; the tangible advantages and the intangible advantages that are brought about by information technology. E-commerce is vital for many companies, today e-commerce has assisted many companies and organizations to revolutionize the manner in which they operate and manage their operations. Though, for a company to realize maximum benefits of e-commerce it must invest in the technology and manpower. (Chan, Lee, & Dillon, 2001)
The tangible benefits of e-commerce touches on the monetary aspect of the company, it touches on the financial benefits that occur due to the company investing in e-commerce that can only be measured using tangible metrics. For example, cost saving, market share, productivity and profitability of the company. These benefits enables the company to make a lot of saving and the money goes along way in improving other aspect of the company. (Chan, Lee, & Dillon, 2001)